SLT: In the past 12 months we have run two news stories in regards to your promotions. In June 2010 you took on cross-functional responsibilities for CIBC Mellon鈥檚 global securities lending division and became co-head alongside Robert Chiuch and now, head of global securities lending. How did this happen?
Rob Ferguson: I鈥檓 thrilled to be given the responsibility of leading CIBC Mellon鈥檚 global securities lending team. We鈥檝e got a great group of people and have lots of good work to do. Robert will surely be missed as he has been a significant contributor to the successes we have had globally, but he has also brought up a very strong team that will continue to bring great success for our clients and our company. I think we are very well positioned for the future.
SLT: How do you feel the industry perceives the departures over the past twelve months from CIBC Mellon to BNY Mellon?
Ferguson: I think our clients will recognise these moves as a great testament to the strength of our people and our programme. Both James Slater and Robert Chiuch moved from our team into senior leadership roles at BNY Mellon 鈥� Robert as head of its US equity and corporate securities team, while James has since moved from COO to head of BNY Mellon鈥檚 global securities lending programme. James鈥� and Robert鈥檚 business-building experience with CIBC Mellon put them in a position to assume these roles, but I think clients are well aware that our strength as a provider is actually built on the depth of our 鈥渂ench strength.鈥� We have a big footprint in Canada鈥檚 lending markets, and we鈥檙e much more than one person.
Our clients saw seamless continuity of service with James鈥� departure, and we all expect Robert鈥檚 transition to be equally smooth. I think that the growth our programme has seen in the past year reflects the confidence our clients have in our services and our programme, and I know I look forward to continuing to expand our client partnerships in the years ahead.
It鈥檚 worth noting that the CIBC Mellon lending team has very strong ties to our US parent company and its lending programme. We share best practices and work together closely, so Robert鈥檚 move to BNY Mellon will help make these already strong ties even stronger 鈥� as they did with James鈥� move. These moves also bring the great benefit of a deeper understanding of the Canadian market to our parent, which is very good.
SLT: With over 21 years experience in securities lending what do you think you are bringing to the position?
Ferguson: Two decades in the industry have given me a very strong understanding of the products, technology and client side of lending. I鈥檝e been with CIBC Mellon since the formation of the joint venture in 1996, and have worked with our securities lending clients and partners for many years. Our team on the borrower side also has the same great strength and depth, so we were very happy to be able to tap Phil Zywot to run our desk as head of trading. Phil will be quite familiar to our clients 鈥� he鈥檚 been with us since 2004.
SLT: How closely do you work with BNY Mellon - is this a match made in heaven?
Ferguson: We鈥檝e worked closely with the former Mellon Bank from the inception of the joint venture, and we continue to have a very close relationship with BNY Mellon to this day. The relationship brings many benefits to both companies: it brings us a size and scale that we wouldn鈥檛 otherwise have, while we give their clients access to dedicated expertise on the Canadian marketplace. James and Robert moving south is a clear indication that BNY Mellon recognises the strength of our insights and our programme. We continue to work very closely with BNY Mellon, so I鈥檓 confident that these moves will make the great relationship between our companies even stronger.
SLT: Having worked through the worst years on record for securities lending, is CIBC Mellon back trading to pre crisis levels?
Ferguson: The industry certainly isn鈥檛 back to pre-crisis levels yet; but we鈥檙e probably back to where we were in 2007. More importantly, we continue to see growth in on-loan balance (both for cash and non-cash collateral), and also in the number of clients participating in lending activities.
From CIBC Mellon鈥檚 perspective, we鈥檙e committed to giving our clients strong reporting and information to help them make lending decisions that are right for their businesses. We鈥檝e seen a 鈥渇light to quality,鈥� which has earned us many new lending clients as market participants seek out a high-quality lending programme with a stable provider. Clients are definitely looking for value in all aspects of their relationships, including fair spreads, great relationship management and robust technology 鈥� all areas of strength for CIBC Mellon and our lending program.
SLT: What are the main changes you are observing in your clients鈥� behaviour in relation to securities lending?
Ferguson: The credit crisis put the focus squarely on managing risk. Whether it be for analysts or members of clients鈥� Boards, people wanted to understand the impact of the Lehman Brothers鈥� collapse on their lending programs. We鈥檝e seen a movement back to focusing on finding a healthy balance between risk and reward - exactly as it should be. Similarly, prior to Lehman Brothers consultants would put most of their emphasis and analysis on revenue estimates and split, but have since returned risk to its appropriate position as a critical element within a more fulsome view. We continue to support clients and their consultants by providing a variety of reporting to support clients across the spectrum from detailed analysis to Board-level summaries.
SLT: Canada came through the financial crisis relatively unscathed, why is this?
Ferguson: We have endured some pain but have got off lighter than the US and Europeans. There are a few reasons for this. First and foremost, Canada has a strong, well-capitalised and well-regulated banking industry that was able to weather the shocks. Our real estate lending regulations prevented the emergence of the same asset bubble and sub-prime mortgage challenges that affected others, while our federal government鈥檚 fiscal and monetary policies helped mitigate economic declines. And lastly, we had our share of luck: our resource-based economy has benefitted from historically high commodity prices.
SLT: You chaired the recent inaugural Canadian 网爆吃瓜 Lending Association (CASLA) conference. How much work went into that, and how successful do you think it was?
Ferguson: There were a lot of competing events in the market, so we decided on a very aggressive timeline 鈥� just three months. There was a lot to do in a short amount of time In terms of lining up the agenda, speakers, sponsors, venue, attendees and many other aspects - particularly as this was a first-time event. Fortunately, we had a strong team working on the event. I鈥檓 particularly grateful for the strong efforts of the marketing groups at several member firms and some vendors 鈥� everyone came together to put on a very successful event.
Attendance was strong and feedback from event attendees was overwhelmingly positive. The event sponsors were similarly very happy with the event. The conference meant great exposure for CASLA, which saw renewed interest in membership. Like many of the other organisers and attendees, I am looking forward to making the conference an annual event that gets bigger and better each year.
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